Are Phoenix Home Buyers Getting Crowded Out By Investors

September 19, 2009

A look at how many homes are sold to investors in Greater Phoenix now and in the past.

A Realtor and her clients walks into B... a new home subdivision office/model home. They are surprised to see a large bustling party going on with fancy hors d'oeuvres and lots of drinks going around.

Suddenly a lady comes up and says, "are you one of the investors? How many homes would you like to buy?

After finding out the Realtors cash buyers are only interested in one home she skirts back into the crowd never to be seen again.

Sounds like 2005 ha? No, this is real and it's September 2009 in Surprise, AZ.

There sure are many investors our there and from what many are saying they are buying up all the houses. That's not really true despite the rumors going around, but the story above is true.

Investor sales are up over the lows, but they are no where near the numbers we saw in 2005 in terms of units sold, but they are as a percentage of all sales, investor purchases are up to 20% of all sales over the last few months, this is higher then in 2005.

Phoenix Investor Sales

(Single Family Homes in Maricopa County 1/2001-8/2009)

Investors still tend to favor condos over houses, but only 23% of sales are condos compared to a peak of 31.5% in June 2005.

Single family have gained popularity as their prices declined. 19.3% of sales are to investors compared to a peak of 16.1% in May 2005.

Resale residential comprise the bulk of investor sales at 21.2% compared to 20% at peak.

New home sales only make up 3% compared to 11% at peak. The reasons for this are easy. It's the resales that are short sales or bank owned properties sold at a discount or perceived discount so they get the attention.

Investors are out there, but they are not buying all the houses, only 1 in 5, though I bet a more detailed look will show that to be a higher percentage as the price segment goes down and especially in the prime investment area of $70,000-$130,000 where more then 20% of sales are to investors.

There is another lesson to be learned from the story above. When the market was booming in 2004-2006 many new home sellers shunned investors. When the market crashed they begged for anyone to buy their overstock. Yesterday the lost some normal buyers because

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